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Par tech 401 K retirement plan: Online chat | My lessons learned

Dec. 8, 2021

Introduction

I did not spend any time ( less than 60 minutes) from 2010 to 2018 related to my 401 K plan with par tech. I found out my mistake until November 2018, and I missed SPX 500 gain 300% from 2007 to 2018, and my account has balance around $8000 dollars with annual gain 1% from 2007 to 2018, and I learned that it is life and we all live once, and we have to live and learn, and share with others to build a good community around us. 

My chat | Message center | Charles Schwabs  

Chat Started

11:41 AM

Getting Connected

11:41 AM

RPS Team Connected

11:41 AM

RPS Team

12/8/2021 Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans and has provided this communication to you as part of the recordkeeping services it provides to the Plan. Trust, custody, and deposit products and services are available through Charles Schwab Bank. ‎2020© Schwab Retirement Plan Services, Inc. All rights reserved.

11:41 AM

Kelley W Connected

11:41 AM

Kelley W

Hi Jianmin, how are you today?

11:41 AM

JIANMIN

very good.

11:41 AM

Kelley W

Good to hear! I see you have some questions about the advisory fee on the plan, is that correct?

11:42 AM

JIANMIN

Yes.

11:42 AM

Kelley W

So what exactly is your question about that advisory fee?

11:42 AM

JIANMIN

I do not have to pay fee before, but last 12 months the fee came out. What is the trigger for this fee? How to avoid if possible?

11:43 AM

Kelley W

Let me take a look and see when that fee changed and the plan started implementing it.

11:44 AM

JIANMIN

Sure.

11:45 AM

Kelley W

Ok, so it looks like a notice was sent out on 2/27/2020 that the fee structure of the plan had changed and was effective as of 4/1/2020.

11:49 AM

JIANMIN

So can I make the change, invest once a year instead of multiple times and pay advisory fee multiple times.

11:51 AM

Kelley W

The overall reason for the fee change was for transparency. Fee had always been paid by the plan participant, but in a different manner. As of 4/1/2020 there is a separate recordkeeping and investment advisory fee which is charged to your account. But there is also a credit back into your account for any funds you're invested in that may result in revenue sharing.

11:51 AM

JIANMIN

I mean those dividends are got charge so many times.

11:51 AM

Kelley W

The changes are for all plan participants and you are unable to reduce or eliminate those fees.

11:52 AM

JIANMIN

I mean that there is option to leave dividend not invested, so that dividends can be kept in money market first, if needed, I will make purchase manually.

11:53 AM

Kelley W

So whenever you see an Investment Expense Reimbursement, that is the fund giving you money back for expenses. Before you didn't see that on your account as it just reduced the fee. Now you see how those reimbursements and the fee.

I am not sure I understand you question about leaving dividends uninvested.

All dividends are invested into the fund they originated from, there is not a way to change that within the 401k.

11:54 AM

JIANMIN

I see. I also noticed that I have small balances for a few funds, less than $10 dollars, how can I clean those funds and avoid fee?

11:55 AM

Kelley W

So there are no fees associated with placing investment transactions on the account. You can place a rebalance or you can place individual transfers from those funds with residual balances into another fund.

11:58 AM

JIANMIN

Thank you for the answer.

How many times I can do rebalance in a year?

11:58 AM

Kelley W

There are no limits on rebalances, but there are 3 funds that have trading restrictions. Meaning if you sell out of them you will not be able to do a rebalance or transfer back into those funds for 30 days. So if one of these restrictions is triggered you will not be able to rebalance the account until that restriction is lifted. You can place individual transfers into other funds during that time though if you want to make changes to your investments.

12:00 PM

JIANMIN

Just double check: advisory fee will get reimbursed based on your following statement:

So whenever you see an Investment Expense Reimbursement, that is the fund giving you money back for expenses. Before you didn't see that on your account as it just reduced the fee. Now you see how those reimbursements and the fee.

12:01 PM

Kelley W

Yes that is right. You will now see those fees and reimbursements on the account whereas before you did not.

12:03 PM

JIANMIN

Do you know how often the reimbursement will happen? How many times in a year? I did see once but I forgot without your remind.

12:04 PM

Kelley W

Based off the account history it is likely this will occur quarterly as that is when plan fees are applied the your account.

12:05 PM

Charles Schwab - Par 401 K 14 year history from 2007 to 2020

May 10, 2020

Introduction

It is tough road to be an investor last 12 months. I like to showcase my par 401 K and see last 12 months performance.

Par 401 K 10 year history

My original investment is $8000 US dollar started from 2007. Here is the blog.

Preparation - Sell par 401 K equities and keep the bond position

May 7, 2020

Introduction

It is important for me to stay in the market but take less risk for down turn. I am thinking about selling position when SPX is above 2800, and then I will definitely get back in when SPX is around 2400.

Preparation

I need to sell a few positions, so that I will not buy low and sell high.

TRBCX
FXAIX

My preparation for market testing low - SPX 1200 - 1500

April 20, 2020

Introduction

It is time for me to prepare a business plan called market testing low - SPX 1200 - 1500. I like to sell my position in my Par 401 K and VOO $1600 in Key largo, so that I can hold on sideline to wait market drop 10% or 20% and then put back into SPX, and then 50% off SPX 1200 - 1500. I really like to learn more before I can work on any trade.

My business plan

It will take me 300 to 400 hours to be a good learner about common mistakes for day trade, short term trading and also long term investor. I have to prepare myself to learn first before I can learn how to trade and have good psychology as an investor.

I like to learn more about business, stock market and investor basics. It makes my life more challenge and there are business opportunity for me to make thousands as well in short term as well.


TFSA VFV.TO   avg 71.368, 83 share, market value $5,880.55, gain (-58.93)

Key largo Ameritrade.com
  VOO 6 shares, avg price $259.10, $1554.60, gains (-51.59)

Par 401 K
  $6,000 US dollars <- Need to prepare for SPX 1200 - 1500
  Fidelty 500 Index   $729.41
  T. Rowe Price,        $537.59
  Pioneer equity income Y. $454.05

30% bond, 70% equity - think about rebalance, SPX 2200, sell 15% bond, purchase equity.

Charles Schwab - Par 401 K after crash and rebounce

April 19, 2020

Introduction

I was so busy with another two investment accounts. So I did not do anything for this account during crash and rebounce from February 20 to April 19, 2020. I have to review the portfolio and simplify the positions, so that I can easily rebalance when market swings.

Case study

Right now, the market value is still less than book value last April 2019 I started to build the portfolio.

Actionable Items

I should just sell everything in the portfolio this January. And then I set up a portfolio around March 23, 2020. I should set up 80% equity and 20% bond. Now I can sell all positions, and wait another 10% drop at least.

I will sell it before the market goes down from March 17 highest point 20%. And I will think about reorganize the portfolio.

Mint trend - investment accounts rebounce 12 business days

April 19, 2020

Introduction

It is tough for me to learn from stock market. The USA government treasury department made a few emergency help for the market, and I like to document my investment account balance history from lowest day March 23, and 12 business day rebounce with 28%.

Mint trend

Comparison

Actionable Items

I did not do anything for my Par 401 K account. But it should take me less than one hour to sell highest point, and then get back into the market when market is lowest on March 23, 2020.

I should learn to prepare a check list, so that I have things to follow instead of being controlled so many emotions when market was lowest on March 23, 2020.

My investment account market value went up from $86183 dollars, March 23, SPX 2237 to $99473, April 19, SPX 2874.

I like to prepare market to test low around SPX 1200, the market value of all my investment will go down $16000 from 2200 to 1200. I need to take a few accounts stop loss, and then let one account continue to swing with the market.

5 investment accounts went down bear market game together

April 11, 2020

Introduction

It is my learning process as an investment as 53 year old. I let five of my investment accounts went down bear market game together, and then finally I felt so relax to take care of those loss, and felt much better today. But I should review what are my decision process.

5 accounts went down bear market game together

I have 5 investment account, I can stop three of accounts in less than one hour.

First two accounts, $10,000 with Scotia bank. If I stop the plan, then I have to make an appointment, but I was too busy. I could not make it.

I have an account with Questrade.com, with TFSA over $68,000 dollars. It is easy for me to sell when I have all profits over $2500. I can keep one small acount like Par 401 K, and then reduce my risk to minimum.

I have an account with Ameritrade.com, best brokerage company. It should be so easy for me to sell over $2,000 dollars unrealized gains and then avoided the bear market loss, and then I could dive in when SPX was 2200.

Mint summary of investment account

Feb. 27, 2020 to April 11, 2020

Lessons learned through bear market

I like to write down what I learn from bear market, what I should learn should help me to generate more confidence on stock market. I like to find opportunities to build wealth through investment opportunities I choose.

Less than $6000 dollars unrealized losses is not so depressing, since I learn how to deal with my anxiety better when market swings down over 30% to 40%. It is important for me to learn as a long term invester, do not time the market.

March 16, 2020, I was panic and planned to sell 25% equity. Here is the blog.
March 27, 2020, I purchased distressed oil stock, here is the blog. And one week later, on April 2, 2020, I wrote a blog about 20% gains. Here is the blog.

Actionable Items

I have to ask myself deep in the heart. Why did I choose to let all my investment account go through bear market instead of taking 6% profit to run and avoid bear market from Feb. 6 2020.

One of ideas I thought about is that 6% does not last too long. If I save in CD it will take 4 years to get those profit. What is my goal to double the money? So I like to go through the process and see how many opportunities will come out, how many issues I have to work on before I can succeed as a long term investor.

So do not time the market. Do not panic, it is my original plan. I already spent over thousand hours to study, I should not worry about too much the pain, market will come back after three years for my balance portfolio.